Canadian malls need to diversify to become destinations for shoppers, say experts

MONTREAL — The rise of online shopping is forcing Canadian malls to diversify and become destinations that offer a range of services including entertainment and sporting venues in addition to traditional clothing stores, a Montreal real estate conference heard Tuesday.

"The mall has to become more interesting," said Eric Foster, a real estate consultant who helped develop the large, mixed-use DIX30 shopping complex on Montreal's south shore. Its amenities include 65 restaurants, food shopping, an indoor soccer venue and a training centre for the Montreal Canadiens.

"We have to give different reasons for people to move out of the house, take the car and get to the mall in a nicer environment, with more choices," said Foster.

While some large mall owners are investing in changes, he said considerable spending is required because many properties in urban centres like Montreal are more than 40 years old.

Power centres that only offer a series of big stores is not the answer, he added.

Consumers of all ages, but particularly millennials, are seeking places to meet others and enjoy new experiences and malls can deliver that venue, said Emeka Mayes, director of acquisitions for First Capital Realty, one of Canada's largest commercial property owners with 161 properties in four provinces.

"I think it is important to not only try to fill the empty stores but to think more long-term to have a good mix of tenants," she said.

Manon Larose, vice-president of retail leasing for Quebec-based Cominar, said Canadian malls have to reinvent themselves to convince people to stay longer and spend more money.

That includes adding daycare centres, medical facilities and gyms — a change from a few decades ago when some malls were loathe to even have supermarkets or restaurants occupy many parking spots, she said.

"That's what everybody wants: to create an environment where people can do many things."

Larose said Cominar is increasingly adding office and residential uses to commercial spaces.

She said shopping centre owners can no longer rely just on fashion stores to drive overall retail sales.